Why acquisition strategy is critical for your product and how to think about it
Without the right acquisition strategy, few people will recognize the product and the startup will die.
This post at a glance:
What is acquisition strategy?
Why should you care about it in building a product?
Why short and long-term must go hand-to-hand
List of channel options you can consider 🔒
Notes for product managers and designers: how to utilize it in your work 🔒
Action plan to draft your acquisition strategy 🔒
Some people think if they build a great product, people will come. But this is no longer true in the digital era, where everything competes for your attention. Peter Thiel PayPal co-founder shared in his book Zero to One, "Poor distribution is the number one cause of failure."
Without growth, few people will recognize the product, and the startup will die.
Facebook was the first one who was doing the growth intentionally. They established the growth team in around 2008, and their active users grew significantly from 300 million to 1 billion monthly active users. As a result, almost every other top company in Silicon Valley established its growth teams, from LinkedIn to Pinterest to Uber, SurveyMonkey, Atlassian, Airbnb, Slack, and even Tesla.
As a product builder, refining your acquisition strategy means you design how you want to reach your potential customers—we call this channel. We must hypothesize about which channel is most effective and cost-effective.
But first, you should think holistically about both the short and long term.
Think both the short and long term
In building your PMF narrative, you don't need an extensive analysis of growth just yet. Your goal is to define hypotheses on what channels could effectively reach customers in the short and long term.
For the short term, you want to focus on anything that can help you get initial traction, even though it's not a scalable channel. For example, you can cold message customers, use a partner's network, or make a deal with a company manually.
Long-term channels, however, are scalable channels that can enable you to reach a much larger target audience, such as paid marketing or virality. Let's look further into the channel you can consider for the long term.
Stripe used to recruit users manually in their early days. The founders will go to the customers and setup the stripe by themselves. This is a good short-term channel because they can learn a lot during that process—discovering bugs along the way (source). While it’s not scalable in the long run, it’s a good short-term channel.
Principle: Think about both short and long term from the get-go.
If you only focus on the short-term channel, it's not scalable and expensive. If you only focus on the long-term channel, you can't get the initial result quickly and will die before you can execute your long-term strategy.
So, what channels can you consider as a product builder?